Mar 02, 2012
Alternative renewables ownership models come under the spotlight at Numsa conferenceBack
Eskom|Africa|China|Denmark|France|Germany|Mexico|South Africa|Manufacturing Base
© Reuse this
Numsa, of all the Congress of South African Trade Unions affiliates, has been most active with respect to green economy issues and renewables. The trade union also has active shop stewards involved in green economy issues in different sectors. Numsa’s coordinated approach is impressive.
Numsa is also opposed to nuclear power and sees renewables as a strategic intervention to stimulate green growth. Numsa’s priority is employment growth and it wants to ensure that any green economy investments driven by the public sector are stable, reach critical mass and are sustainable. Numsa, like so many unions, is an ally of the green economy, but only if this is not all about profiteering and a new form of worker exploitation. The green economy is an important part of the real economy – it has the potential, if implemented in the right way, to expand our manufacturing base.
The Numsa conference focused on how renewables development is managed and who benefits from the stimulation of this sector around the world as this could foretell the future of the sector in South Africa.
There is always the danger that the green economy becomes a rapacious rent-seeking affair in which national interests become subsidiary to greed. There is already an element of that in the solar water heating industry – if one considers the plethora of companies that have flourished on the back of a subsidy and government procurement. Subsidies should temporarily lift the economics of green technologies but, if they are not well managed, they are often gamed for rents.
Numsa’s conference opened a new vista of debate that should be welcomed, and proposals coming out of the conference should be given some thought. So far, we have only two types of ownership models: State and private. Eskom is building a sliver of renewables and the rest of the projects are being roll out by private developers.
The Numsa conference facilitated an exposition of many alternative models and options to mull over, drawing from international experience.
There is nothing to suggest that IPPs cannot be community owned but the IPP concept driven by the National Treasury’s public–private partnerships unit is based on a distinct ‘private owned’ model.
Why did Numsa take an opposite view to the prevailing IPP model? Ownership matters because it defines the weight of public interest compared with private self- interest. This, in really, is the nub of the question that the Numsa conference sought to under- stand and debate. Numsa was seeking to unpack a few things. The trade union was seeking to open the debate on alternative models of ownership where the social dividend is greater than excessive profit taking. It posited that the IPP model, as it stands, needs to diversify opportunities for alternative forms of ownership and the conference debated questions about who owns the green economy, as the roll-out of the IPP procurement process may not necessarily lead to high enough levels of localisation because an IPP approach may be too fragmented to support greater thresholds of localisation. Numsa was also seeking to demonstrate the poverty of ideas and the lack creativity in the current model of renewables procurement.
Currently, communities can participate in private-led initiatives either as joint shareholders or through broad-based black economic-empowerment arrangements. But the private ownership model is the dominant model for IPPs in South Africa.
International delegates shared experiences on costs related to the roll-out of renewables using a private-sector- driven IPP model, compared with a public-sector-owned and -driven renewables build programme. Depending on the rate of return demanded by shareholders, certain types of ownership models can deliver a public good at much lower costs than a pure privately owned model.
Lots of examples were given of how local communities in Denmark, France, Germany and Mexico evolved renewables ownership models where communities owned wind or solar projects. Community shareholders also had access to soft loans from cooperatives and State or development banks.
Numsa fired the first salvo with respect to thinking about alternative models. At the end of the conference, Numsa said it recognised that the current IPP process could not be stalled, but that it could be influenced. Numsa is thinking of establishing a ‘Bid Watch’ initiative to ensure that the current bid process is not subject to corruption and is run in a way that ensures diversification of ownership and other social benefits.
Edited by: Martin Zhuwakinyu© Reuse this Comment Guidelines
Other Saliem Fakir News
Updated 7 hours ago Telecommunications group Gilat Satcom on Monday said it was set to sponsor the second yearly Great Rift Valley Mining Summit, where it planned to unveil new mining-focused mobile satellite services and technologies. The summit, held from March 13 to 14, in Lusaka,...
Recent Research Reports
Automotive 2014: A review of South Africa's automotive sector (PDF Report)
The report provides insight into the business environment, the key participants in the sector, local construction demand, geographic diversification, competition within the sector, corporate activity, skills, safety, environmental considerations and the challenges...
Construction 2014: A review of South Africa's construction sector (PDF Report)
Construction data released during 2013 hints at a halt to the decline in the industry during the last few years, with some commentators averring that the industry could be poised for recovery. However, others have urged caution, noting that the prospects for a...
Electricity 2014: A Review of South Africa's Electricity Sector (PDF Report)
This report provides an overview of the state of electricity generation and transmission in South Africa and examines electricity planning, investment in generation capacity, electricity tariffs, the role of independent power producers and demand-focused initiatives,...
Defence 2013: A review of South Africa's defence industry (PDF Report)
Creamer Media’s 2013 Defence Report examines South Africa’s defence industry, with particular focus on the key players in the sector, the innovations that have come out of the defence sector, local and export demand, South Africa’s controversial...
Road and Rail 2013: A review of South Africa's road and rail infrastructure (PDF Report)
Creamer Media’s Road and Rail 2013 Report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move...
Liquid Fuels 2013 (PDF Report)
Creamer Media’s 2013 Liquid Fuels report examines South Africa’s liquid fuels market, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing,...
This Week's Magazine
This month’s report includes details of junior miner Papillon Resources’ mining permit for its flagship Fekola gold project, in Mali; the Waterberg Coal Company’s feasibility on the development of an opencast mine, in Limpopo, to produce ten-million tonnes a...
A structured approach, wherein managers personally engage at each level of the project, is necessary to mitigate delays to the workflow on mega construction projects, says State-owned Eskom Kusile power station projects GM Abram Masango. The 4 800 MW Kusile power...
Construction of transmission lines to evacuate power from a regional hydroelectric project in East Africa, which was hanging on the balance following the withdrawal of financing by key partners, is now back on track. After six months of uncertainty, the African...
Three Memorandums of Understanding (MoUs) were signed between South African and Malaysian companies at the Malaysian High Commission in Pretoria on Friday. These MoUs are part of the indirect offsets programme South Africa is providing in return for Malaysia’s...
The South African new vehicle market may well dip to 640 000 units in 2014, says Toyota South Africa Motors (TSAM) sales and marketing senior VP Calvyn Hamman. This is the first prediction that anticipates a drop in the market. To date economists and industry bodies...
Next ArticleWhat should be done about concentrating solar power